Carney Call to End Men-Only Club Puts Pressure on Osborne

A view of Bank of England's monetary policy committee (MPC) briefing is seen inside the central bank's headquarters in London on July 1, 2013. Photographer: Jason Alden/Bloomberg

Aug. 12 (Bloomberg) -- Bank of England Governor Mark Carney
is the new face of gender equality in the City of London.

His comments last week on the lack of women on the central
bank’s rate-setting Monetary Policy Committee have raised
pressure on Chancellor of the Exchequer George Osborne to
broaden the pool of applicants and ensure the next person he
picks is female.

Carney, the former Bank of Canada governor, told the BBC
Aug. 8 the absence of women on the MPC since mid-2010 is
“striking.” Since the central bank was granted operational
independence from government in 1997, only four of the 33 people
who have served on the panel have been women.

“It’s bizarre to have no women on the MPC,” Andrea
Leadsom, a Conservative lawmaker who’s one of only two women on
the 13-member parliamentary panel that scrutinizes the central
bank, said in an e-mail. “This isn’t about feminism, it’s about
the essential need for a wide range of views, stemming from a
wide range of backgrounds. The lack of diversity in our key
regulators and policy-making institutions is a huge drawback to
the U.K.”

The last three appointments of part-time MPC officials
since Kate Barker left in mid-2010 have been marked by a
shortage of female applicants, with a ratio as low as 26 to 1.

Osborne gave Carney a mandate for change at the 319-year-old institution when he picked him as the first foreigner to
lead the BOE. He’s immediately changed the way the MPC operates
by introducing forward guidance on interest rates. The new
governor’s remarks now raise the stakes for the Treasury to
contribute to a remodeled central bank.

Government Responsibility

“It’s the responsibility, obviously, of the government to
select the candidates” for the MPC, Carney told the BBC.

The Treasury’s next opportunity to add a woman to the nine-member panel will come when they seek a replacement for Deputy
Governor for Monetary Policy Charlie Bean, who retires in June
2014. It’s already missed one chance this year, when Osborne
announced last month that Jon Cunliffe, Britain’s permanent
representative to the European Union, will replace Paul Tucker
as deputy governor for financial stability on Nov. 1.

“I would strongly encourage George Osborne to listen to
Mark Carney and encourage more women to apply to the MPC,”
Brooks Newmark, a Conservative who sits alongside Leadsom on the
House of Commons Treasury Committee, said in a telephone
interview. Like Newmark and Leadsom, Osborne is a Tory.

‘Greater Number’

“The government would like to see a greater number of
women apply for future appointments and will continue to
encourage them to do so,” the Treasury said in an e-mailed
statement.

The Treasury has direct authority over seven of the nine
positions on the MPC, which consists of five senior BOE staff
and four external members, who work outside the bank and serve
part-time on the panel.

The external members are appointed by the Treasury. Of the
internal members, the governor and two deputy governors are also
chosen by the government. The remaining positions are held by
the BOE’s executive director for markets and the chief
economist, who are appointed by the governor.

“The chancellor is responsible for appointments, but
shockingly there have been no women on the MPC since June
2010,” Catherine McKinnell, Treasury spokeswoman for the
opposition Labour Party, said in an e-mailed statement. “This
is an appalling state of affairs which George Osborne should put
right.”

Jane Austen

Carney’s remarks were his second in less than 24 hours on
the status of women in the U.K. He said Aug. 7 the harassment of
campaigners for a woman to appear on U.K. banknotes was
“shocking.” He announced last month that 19th-century novelist
Jane Austen would appear on the next 10-pound note, ensuring the
presence of at least one female historical figure on the
currency.

Before taking up his appointment officially on July 1,
Carney also appointed Charlotte Hogg as the bank’s chief
operating officer, making her its most senior female employee.

An issue with recent MPC appointments has been a shortage
of female applicants. Thirty-four men and four women applied for
the spot that was awarded to Martin Weale, who replaced Kate
Barker, according to the Treasury. There was only one woman
among the 27 people who applied for the position that was filled
by Ben Broadbent in June 2011. For the slot that was taken by
Ian McCafferty in September 2012, 22 men and seven women
applied.

The Treasury must take the lead in recruiting women to
apply for new jobs, Karen Mumford, economics professor at the
University of York in northern England and chairwoman of the
Royal Economic Society’s Women’s Committee, said in a telephone
interview. She said it can encourage more female applicants by
showing women that the job can be suitable for them.

‘Cold Turkey’

“For those sorts of positions, you only apply if you’re
asked, and to apply cold turkey would be surprising,” Mumford
said. “They’ve got to go out headhunting to encourage people to
apply.”

There may be a reluctance on the part of women to engage in
self-promotion, said Richard Disney, a part-time professor at
the University of Sussex in Brighton and a fellow at the
Institute for Fiscal Studies. He’s also a member of the RES’s
Women’s Committee.

“Sometimes women economists aren’t so keen to put
themselves forward,” he said. “There are a lot of male
economists in finance who aren’t shy of blowing their own
trumpet, and maybe female economists don’t see themselves in
that way.”

Disney, Mumford and lawmaker Newmark said there’s no
shortage of women to fulfill the role. There are now 70 female
economics professors in the country, up from one 20 years ago,
according to Mumford.

‘Good Women’

Osborne is “undeniably under more pressure” after
Carney’s comments, said Jens Larsen, an economist at RBC Capital
Markets in London and a former BOE official. “There are plenty
of good women out there. There might be a different pool of
candidates the next time around.”

Undergraduate enrollment in economics courses has been a
“strong growth area” in the last decade for both men and
women, Mumford said. Still, the ratio of women to men taking
such courses has dropped to 28 percent from about 30 percent in
the past 10 years. The reasons aren’t clear, and the RES is
considering surveying undergraduate and graduate students about
it, she said.

Attracting women candidates to public service can be a
matter of improving working practices, said Larsen, who worked
at the BOE from 1998 to 2010. The bank moved “very fast”
during his time there to introduce flexibility, such as allowing
people to work from home and discouraging meetings in the early
evening.

‘Retain Talent’

“These institutions that struggle to compete on salaries
have to find other dimensions to retain talent,” he said. “One
of the ways to retain talent is to offer women great career
opportunities and a more balanced lifestyle than in a job like
the one they may currently have.”

Carney said last week that for its part, the central bank
must encourage female economists “all the way through the
ranks.” That will encourage the diversity of opinion needed to
improve macroeconomic policy making.

“The bank’s approach is to build up the pipeline, and then
hope that when you have to make the decisions on who gets
promoted you’ll have a deep pool of people to choose from,”
Larsen said. “It’s just a matter of time.”